Retail Sales Fell in January

British annual retail sales unexpectedly fell in January, recording its weakest performance since last August and amid slower sales of non-food products. The rise in consumer prices might be beginning to weigh on consumer spending. The mortgage lender, Halifax indicated that UK’s house prices declined for the first time in five months in January.

GBP continues to weaken against both the USD and the EUR, as Brexit consultations in the House of Commons continue. So far the government has defeated any amendments to the proposal, but fears remain that any changes to Article 50 now could cause a delay in triggering divorce proceedings from the European Union when the Bill is presented to the House of Lords. One of the amendments currently being called for is for the government to guarantee the rights of EU nationals resident in the UK at the time of the Brexit referendum to remain in the UK. The Prime Minister made it clear when she presented her 12-point Brexit plan that she wanted these rights to be confirmed at the earliest possible date.

The US dollar on Tuesday continued to recover from a recent bout of selling, supported by comments from a US Federal Reserve official suggesting that the Bank has not ruled out an interest rate hike as soon as next month. The Fed is due to hold its next interest rate meeting 14-15 of March, and Mr Patrick Harker is the second official of the bank to indicate in recent weeks that a rate increase could be announced then and should be considered as a potential 25- basis point increase.

Another quiet day for data today, later today we have an RBNZ interest rate decision and monetary policy statement, and many Analysts are expecting a rate cut to record lows of 1.75% in an attempt to match inflation forecasts.

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